How to seize the bull market? Uncovering the three major rules of BTC bull-bear cycle

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On the morning of June 22, 2019, BTC volume exceeded 100 million US dollars, setting a new high for the year. So, how to seize the bull market?

Risk warning: Short-term increase is too large

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On the morning of June 22, 2019, Beijing time, BTC broke through $10,000, setting a new high for the year. Tongzhengtong accurately grasped the lows and hotspots of this round of bull market, and the recommended BTC and BNB both achieved impressive returns.

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From victory to victory

As early as October 2018, during the bear market, Tongzhengtong pointed out:

The BTC bull market may start around May 2019.

In March 2019, Tongzhengtong released a series of reports, including "Where is the BTC bottom?" and "[Classic Update Reappearance] The Three Major Laws and Applications of BTC Bull-Bear Cycles - Freezing Point Outlook 1", which repeatedly pointed out that "BTC's third halving will start around May 21, 2020, and the BTC price upward cycle may start around May 2019."

The logic of BTC halving has been verified. Similar to the two price cycles that have ended, the fourth round of price upswing came as expected one year before the third BTC halving. Starting in May 2019, BTC broke through multiple strong resistance levels. As of June 22, 2019, the BTC price has exceeded $10,000, setting a new high in the past year.

On December 5, 2018, Tongzhengtong proposed a market neutral strategy of long BNB and short OKB. As of June 22, 2019, BNB increased by about 573.25%, and OKB increased by about 40.65%. Over the past six months, the strategy's pure alpha return has reached 532.6%.

In February 2019, Tongzhengtong released "Shocking Secret! 47% in 8 Months, a Certain Opportunity in the Cold Winter", and in March 2019, it released "BNB: Market Turning Point and Davis Double Click", repeatedly reminding relevant investment opportunities.

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How to seize the bull market?

Wall Street is the place where history repeats itself most often and consistently. The most striking thing about reading modern accounts of stock market booms or panics is that stock speculation and speculators are almost exactly the same today as they were in the past. The game hasn’t changed, and human nature hasn’t changed.

—Edwin Raphael, Reminiscences of a Stock Operator, 1923

The key to grasping the bull market is to remember that everyone is mortal and everything has its cycle. To invest, you must: understand the cycle, believe in the cycle, and follow the cycle.

Humans live in a world where cycles are everywhere. The cycles of nature are relatively regular. For example, the activity cycle of sunspots is about 11.2 years, and when they are active, they will affect the earth's magnetic field. However, the cycles of economic activities, corporate activities, and investment activities in which humans participate can easily go to extremes. Common investment cycles include fundamental cycles (such as economic cycles, corporate profit cycles), psychological cycles (such as psychological pendulum cycles, risk attitude cycles), and market cycles (such as stock market cycles, bond market cycles).

In terms of the economic cycle, faster economic growth means there will be more consumer demand, so companies can sell more goods at more favorable prices, provide more job opportunities and higher wage levels, further promote more consumption, and corporate revenues will also grow, and corporate profits and stock markets will prosper.

On the basis of economic cycles and corporate profit cycles, investors' behaviors, psychology and attitudes will also fluctuate cyclically, changing accordingly with changes in fundamentals, leading to the emergence of some special cycles, such as the credit cycle. Credit is an indispensable part of the production process. Many economic units rely on the credit market to operate smoothly. Credit also has cycles. With the prosperity of the economy, credit expansion, excessive lending leads to major losses. Major losses cause lenders to stop lending, and the cycle begins to reverse. There are many similar market cycles that are well known to everyone, including real estate, stocks, bonds, gold, foreign exchange, and BTC.

The commonality of investment cycles lies in human involvement, and human nature determines that these cycles go to extremes, either upward or downward. In the fields of economics, business, and finance, the unchanging cycles are based on unchanging human nature.

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Uncovering the BTC bull-bear cycle

There are three major rules for the BTC bull-bear cycle:

1) The BTC bull-bear cycle is closely related to its halving cycle. The complete BTC bull-bear cycle lasts about four years. The price up cycle starts one year before each halving. The first BTC production halved at the end of November 2012, and the BTC price bottomed out in November 2011. The second BTC production halved in July 2016, and the BTC price bottomed out in August 2015. The BTC halving sounded the clarion call for each price up cycle, and the price began to rise rapidly.

2) BTC price volatility decreases as market value increases. Changes in the market value of BTC (circulation) are mainly driven by its price fluctuations. The trend of BTC price increases drives the trend of market value, and BTC price volatility gradually decreases. Similar to the historical process of other asset classes, in the first price cycle, BTC price increased by up to 10,636 times and fell by up to 94%; in the second price cycle, BTC price increased by up to 623 times and fell by up to 84%; in the third price cycle, BTC price increased by up to 98.57 times and fell by up to 84%.

3) The innovation led by BTC continues to evolve and is increasingly recognized by the mainstream. Every bull-bear cycle has iconic innovations and applications. The first time, the birth and gradual application of BTC was a landmark event; the second time, with the re-emergence of BTC in 2013, the craze for copycat tokens hit, and a large number of copycat tokens were produced; the third time, Crowdsale began to become popular around the world, and many websites began to provide news and discussion communities specifically for Crowdsale sales. Since 2017, Crowdsale has dominated blockchain investment, far exceeding the investment of VCs and enterprises. With the development of blockchain technology, the evolution of digital tokens, the improvement of practitioners' cognition, and the evolution of government supervision, the innovation led by BTC continues to evolve and is increasingly recognized by the mainstream.

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Golden Key to the Bull Market

Bull market token layout strategy: BTC positions are kept above 20%, and other tokens are comprehensively allocated according to their own situation. Judging from the market performance of various tokens in previous price cycles, it is recommended to keep BTC positions above 20% in this cycle, and comprehensively allocate other mainstream tokens and other tokens according to their own situation. Although BTC price fluctuations become smaller as the market value increases, the wealth effect is obvious in this cycle, and BTC is still expected to achieve a higher increase. Compared with BTC, other tokens are more elastic and are expected to bring higher returns to investors in the bull market.

Profit outlook for this cycle: BTC target price is about 50,000 US dollars. Based on the three price cycles that have ended, in the first cycle, BTC price rose by up to 10,636 times, in the second cycle, BTC price rose by up to 623 times, and in the third cycle, BTC price rose by up to 98.57 times. Given that BTC still has a lot of room for growth in terms of market value and investor base, BTC can still gain about 10 times in this cycle, with a target price of about 50,000 US dollars. Although many people think that 10 times the profit is not worth mentioning in the bull market of the token market, the essence of the bull market is that most people cannot outperform the market after all.

Notes:

Due to some reasons, some of the terms in this article are not very accurate, such as: token, digital token, digital currency, currency, token, Crowdsale, etc. If readers have any questions, please call or write to discuss.